Rural Wisconsin Health Cooperative How are Federal & State Policies Likely to Affect Rural Health? Tim Size Executive Director RWHC for the Sauk County.

Rural WisconsinRural WisconsinHealth CooperativeHealth Cooperative

How are Federal & State PoliciesHow are Federal & State PoliciesLikely to Affect Rural Health? Likely to Affect Rural Health?

Tim SizeTim SizeExecutive DirectorExecutive Director

RWHCRWHC

for thefor the

Sauk CountySauk CountyInstitute of LeadershipInstitute of Leadership

March 12th, 2009March 12th, 2009


TalkTalk Outline:Outline: A Mix of OpportunitiesA Mix of Opportunities && ChallengesChallengesTalkTalk Outline:Outline: A Mix of OpportunitiesA Mix of Opportunities && ChallengesChallenges

1.1. Context Matters – RWHC Turns 30 in 2009Context Matters – RWHC Turns 30 in 2009

2.2. Why Change on Multiple Fronts?Why Change on Multiple Fronts?

3.3. Federal & State Health Reform OverviewFederal & State Health Reform Overview

4.4. From Reimbursement to Transparent PaymentFrom Reimbursement to Transparent Payment

5.5. Quality or Price, “Show Me the Numbers”Quality or Price, “Show Me the Numbers”

6.6. Workforce: Supply Going Down, Demand UpWorkforce: Supply Going Down, Demand Up

7.7. HealthHealthcarecare Reform Reform Health Reform Health Reform

1.1. Context Matters – RWHC Turns 30 in 2009Context Matters – RWHC Turns 30 in 2009

2.2. Why Change on Multiple Fronts?Why Change on Multiple Fronts?

3.3. Federal & State Health Reform OverviewFederal & State Health Reform Overview

4.4. From Reimbursement to Transparent PaymentFrom Reimbursement to Transparent Payment

5.5. Quality or Price, “Show Me the Numbers”Quality or Price, “Show Me the Numbers”

6.6. Workforce: Supply Going Down, Demand UpWorkforce: Supply Going Down, Demand Up

7.7. HealthHealthcarecare Reform Reform Health Reform Health Reform


1. Context Matters – RWHC Turns 30 in 20091. Context Matters – RWHC Turns 30 in 20091. Context Matters – RWHC Turns 30 in 20091. Context Matters – RWHC Turns 30 in 2009

Advocacy at Advocacy at RWHC is based RWHC is based on the evidence on the evidence but like us all, but like us all, we have a set of we have a set of experiences and experiences and beliefs that beliefs that drive our workdrive our work..

Advocacy at Advocacy at RWHC is based RWHC is based on the evidence on the evidence but like us all, but like us all, we have a set of we have a set of experiences and experiences and beliefs that beliefs that drive our workdrive our work..


RWHC Mission & VisionRWHC Mission & Vision RWHC Mission & VisionRWHC Mission & Vision

Specifics re services available at http://www.RWHC.comSpecifics re services available at http://www.RWHC.com

MissionMission: Rural WI communities will be the : Rural WI communities will be the healthiest in America. healthiest in America.

VisionVision: RWHC is a strong and innovative : RWHC is a strong and innovative cooperative of diversified rural hospitals; it is cooperative of diversified rural hospitals; it is (1) the “rural advocate of choice” for its Members (1) the “rural advocate of choice” for its Members and (2) develops & manages a variety of products and (2) develops & manages a variety of products and services.and services.

MissionMission: Rural WI communities will be the : Rural WI communities will be the healthiest in America. healthiest in America.

VisionVision: RWHC is a strong and innovative : RWHC is a strong and innovative cooperative of diversified rural hospitals; it is cooperative of diversified rural hospitals; it is (1) the “rural advocate of choice” for its Members (1) the “rural advocate of choice” for its Members and (2) develops & manages a variety of products and (2) develops & manages a variety of products and services.and services.


RWHC by the NumbersRWHC by the NumbersRWHC by the NumbersRWHC by the Numbers

• Founded 1979Founded 1979

• Non-profit coop owned Non-profit coop owned by 35 rural hospitals by 35 rural hospitals (net rev ≈ $3/4B; ≈ 2K (net rev ≈ $3/4B; ≈ 2K hospital & LTC beds)hospital & LTC beds)

• ≈ ≈ $7M RWHC budget $7M RWHC budget (≈70% member fees, (≈70% member fees, 20% fees from others, 20% fees from others, 5% dues, 5% grants)5% dues, 5% grants)

• 6 PPS & 29 CAH; 24 6 PPS & 29 CAH; 24 freestanding; 11 system freestanding; 11 system owned or affiliated owned or affiliated

• Founded 1979Founded 1979

• Non-profit coop owned Non-profit coop owned by 35 rural hospitals by 35 rural hospitals (net rev ≈ $3/4B; ≈ 2K (net rev ≈ $3/4B; ≈ 2K hospital & LTC beds)hospital & LTC beds)

• ≈ ≈ $7M RWHC budget $7M RWHC budget (≈70% member fees, (≈70% member fees, 20% fees from others, 20% fees from others, 5% dues, 5% grants)5% dues, 5% grants)

• 6 PPS & 29 CAH; 24 6 PPS & 29 CAH; 24 freestanding; 11 system freestanding; 11 system owned or affiliated owned or affiliated


2. Why Change on Multiple Fronts?2. Why Change on Multiple Fronts?2. Why Change on Multiple Fronts?2. Why Change on Multiple Fronts?

American Hospital Association’s “Health for Life, American Hospital Association’s “Health for Life, Better Health, Better Health Care”Better Health, Better Health Care” August, 2007August, 2007

““Without Without change, change, America’s America’s health care health care capabilities and capabilities and finances will be finances will be overwhelmed.”overwhelmed.”

““Without Without change, change, America’s America’s health care health care capabilities and capabilities and finances will be finances will be overwhelmed.”overwhelmed.”


Spending Trend Is Widely Seen as UnsustainableSpending Trend Is Widely Seen as UnsustainableSpending Trend Is Widely Seen as UnsustainableSpending Trend Is Widely Seen as Unsustainable

Centers for Medicare and Medicaid Services, Office of the Actuary, National Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/http://www.cms.hhs.gov/NationalHealthExpendData/

National Health Expenditure as % GNP

12%

13%

14%

15%

16%

17%

18%

19%

20%

2001200220032004200520062007200820092010201120122013201420152016


Medicare Hospital Insurance Trust Fund TankingMedicare Hospital Insurance Trust Fund TankingMedicare Hospital Insurance Trust Fund TankingMedicare Hospital Insurance Trust Fund Tanking

• In 2013, starts running an annual deficitIn 2013, starts running an annual deficit• In 2019 years, runs out of moneyIn 2019 years, runs out of money• Long-term actuarial balance required in 2007Long-term actuarial balance required in 2007

• an immediate 122% increase in the payroll tax, an immediate 122% increase in the payroll tax, • or an immediate 51% percent reduction in or an immediate 51% percent reduction in

program outlays program outlays • Guess who will take the financial hit (and it won’t Guess who will take the financial hit (and it won’t

mostly be the taxpayer or beneficiary)?mostly be the taxpayer or beneficiary)?

• In 2013, starts running an annual deficitIn 2013, starts running an annual deficit• In 2019 years, runs out of moneyIn 2019 years, runs out of money• Long-term actuarial balance required in 2007Long-term actuarial balance required in 2007

• an immediate 122% increase in the payroll tax, an immediate 122% increase in the payroll tax, • or an immediate 51% percent reduction in or an immediate 51% percent reduction in

program outlays program outlays • Guess who will take the financial hit (and it won’t Guess who will take the financial hit (and it won’t

mostly be the taxpayer or beneficiary)?mostly be the taxpayer or beneficiary)?

2007 Annual Report2007 Annual Report, Social Security and Medicare Boards of Trustees, Social Security and Medicare Boards of Trustees


15% of America Uninsured–46 Million & Growing15% of America Uninsured–46 Million & Growing15% of America Uninsured–46 Million & Growing15% of America Uninsured–46 Million & Growing


Gaps in Where We Need to Be (1 of 2)Gaps in Where We Need to Be (1 of 2)Gaps in Where We Need to Be (1 of 2)Gaps in Where We Need to Be (1 of 2)

PrinciplePrinciple Wisconsin Status/GapWisconsin Status/Gap

Access to Access to coveragecoverage

5.5% uninsured rate; 18/19% for 5.5% uninsured rate; 18/19% for poor/near poor; 4% non-poorpoor/near poor; 4% non-poor

SustainabilitySustainabilityof cost trendsof cost trends

Drivers are demographics, technology, & Drivers are demographics, technology, & inappropriate careinappropriate care

Government Government has a rolehas a role

Fails at guaranteeing access, funding Fails at guaranteeing access, funding education, adequate paymenteducation, adequate payment

Individuals Individuals have a rolehave a role

Pay small portion of their costs; healthy Pay small portion of their costs; healthy lifestyles not a norm; are not lifestyles not a norm; are not sophisticated HC shopperssophisticated HC shoppers

Presentation by George Quinn to WHA Task Force Presentation by George Quinn to WHA Task Force on Access & Coverage, April 23rd, 2008on Access & Coverage, April 23rd, 2008


Gaps from Where Wisconsin Needs to Be (2 of 2)Gaps from Where Wisconsin Needs to Be (2 of 2)Gaps from Where Wisconsin Needs to Be (2 of 2)Gaps from Where Wisconsin Needs to Be (2 of 2)

PrinciplePrinciple Wisconsin Status/GapWisconsin Status/Gap

Providers have Providers have a rolea role

Wide variation in HC practice; are Wide variation in HC practice; are increasingly transparent and accountableincreasingly transparent and accountable

Employers Employers have a rolehave a role

Only 70% provide coverage; little use of Only 70% provide coverage; little use of incentives for choosing lower cost plans, incentives for choosing lower cost plans, etc; wellness programs in infancyetc; wellness programs in infancy

Payers have a Payers have a rolerole

Payment still based on units of service; Payment still based on units of service; little use of P4P little use of P4P

Diffusion of Diffusion of technologytechnology

Surveys show relatively high and Surveys show relatively high and growing use of IT, with higher use growing use of IT, with higher use among larger organizations among larger organizations

Presentation by George Quinn to WHA Task Force Presentation by George Quinn to WHA Task Force on Access & Coverage, April 23rd, 2008on Access & Coverage, April 23rd, 2008


Why Reform May Likely Still Be Incremental Why Reform May Likely Still Be Incremental Why Reform May Likely Still Be Incremental Why Reform May Likely Still Be Incremental

““Despite the prominent role that health care reform is Despite the prominent role that health care reform is playing in the 2008 presidential election, leading pollsters playing in the 2008 presidential election, leading pollsters agree that deep partisan divides & a worsening economy agree that deep partisan divides & a worsening economy limit major change.” Health Affairs, May/June, 2008limit major change.” Health Affairs, May/June, 2008

““Altman Conundrum: Various groups advocating different Altman Conundrum: Various groups advocating different programs to cover the uninsured do indeed represent a programs to cover the uninsured do indeed represent a majority view. But for each group, the next best alternative majority view. But for each group, the next best alternative to its preferred solution is to do nothing, and no single to its preferred solution is to do nothing, and no single group constitutes a majority.” Mark Pauly on Stuart group constitutes a majority.” Mark Pauly on Stuart Altman, renown economist, Brandeis University.Altman, renown economist, Brandeis University.

““Despite the prominent role that health care reform is Despite the prominent role that health care reform is playing in the 2008 presidential election, leading pollsters playing in the 2008 presidential election, leading pollsters agree that deep partisan divides & a worsening economy agree that deep partisan divides & a worsening economy limit major change.” Health Affairs, May/June, 2008limit major change.” Health Affairs, May/June, 2008

““Altman Conundrum: Various groups advocating different Altman Conundrum: Various groups advocating different programs to cover the uninsured do indeed represent a programs to cover the uninsured do indeed represent a majority view. But for each group, the next best alternative majority view. But for each group, the next best alternative to its preferred solution is to do nothing, and no single to its preferred solution is to do nothing, and no single group constitutes a majority.” Mark Pauly on Stuart group constitutes a majority.” Mark Pauly on Stuart Altman, renown economist, Brandeis University.Altman, renown economist, Brandeis University.


3. Federal & State Health Reform Overview3. Federal & State Health Reform Overview3. Federal & State Health Reform Overview3. Federal & State Health Reform Overview

A common thread in A common thread in “reform” from the “reform” from the “left,” “right” and “left,” “right” and “middle” is that “middle” is that American “healthcare” American “healthcare” delivers pretty much delivers pretty much what it is financially what it is financially incented to deliver. incented to deliver.

A common thread in A common thread in “reform” from the “reform” from the “left,” “right” and “left,” “right” and “middle” is that “middle” is that American “healthcare” American “healthcare” delivers pretty much delivers pretty much what it is financially what it is financially incented to deliver. incented to deliver.


Presentation by Stuart Altman to Massachussett’s Health Care Presentation by Stuart Altman to Massachussett’s Health Care Quality and Cost Council, 9/07.Quality and Cost Council, 9/07.

Policy Options to Limit Health Spending (1 of 2)Policy Options to Limit Health Spending (1 of 2)Policy Options to Limit Health Spending (1 of 2)Policy Options to Limit Health Spending (1 of 2)

Very limited impact (in short run)Very limited impact (in short run)• Encourage greater use of preventive servicesEncourage greater use of preventive servicesLimited impactLimited impact• Provide better price and quality informationProvide better price and quality information• Require patients to pay moreRequire patients to pay more• Restrict use of harmful careRestrict use of harmful care• Create a governmental “high cost reinsurance system” Create a governmental “high cost reinsurance system”

with effective case management for chronic conditionswith effective case management for chronic conditions• Reduce expense/waste of medical malpractice systemReduce expense/waste of medical malpractice system• Pay-for-performance reimbursementPay-for-performance reimbursement

Very limited impact (in short run)Very limited impact (in short run)• Encourage greater use of preventive servicesEncourage greater use of preventive servicesLimited impactLimited impact• Provide better price and quality informationProvide better price and quality information• Require patients to pay moreRequire patients to pay more• Restrict use of harmful careRestrict use of harmful care• Create a governmental “high cost reinsurance system” Create a governmental “high cost reinsurance system”

with effective case management for chronic conditionswith effective case management for chronic conditions• Reduce expense/waste of medical malpractice systemReduce expense/waste of medical malpractice system• Pay-for-performance reimbursementPay-for-performance reimbursement


Presentation by Stuart Altman to Massachussett’s Health Care Presentation by Stuart Altman to Massachussett’s Health Care Quality and Cost Council, 9/07.Quality and Cost Council, 9/07.

Policy Options to Limit Health Spending (2 of 2)Policy Options to Limit Health Spending (2 of 2)Policy Options to Limit Health Spending (2 of 2)Policy Options to Limit Health Spending (2 of 2)

Greater impactGreater impact• Restructure delivery system (integrated care)Restructure delivery system (integrated care)• Develop government programs to conduct Develop government programs to conduct

“c“comparative effectiveness studies”omparative effectiveness studies”• Restrict use of marginally useful careRestrict use of marginally useful care• Limit supply of expensive servicesLimit supply of expensive servicesGreatest potentialGreatest potential• Regulate payments to providersRegulate payments to providers• Establish global budgetsEstablish global budgets

Greater impactGreater impact• Restructure delivery system (integrated care)Restructure delivery system (integrated care)• Develop government programs to conduct Develop government programs to conduct

“c“comparative effectiveness studies”omparative effectiveness studies”• Restrict use of marginally useful careRestrict use of marginally useful care• Limit supply of expensive servicesLimit supply of expensive servicesGreatest potentialGreatest potential• Regulate payments to providersRegulate payments to providers• Establish global budgetsEstablish global budgets


Outline of Obama Health Plan ( 1 of 3 )Outline of Obama Health Plan ( 1 of 3 )Outline of Obama Health Plan ( 1 of 3 )Outline of Obama Health Plan ( 1 of 3 )

The plan creates a 10-year reserve fund of $630 billion to finance The plan creates a 10-year reserve fund of $630 billion to finance health reform efforts, with half of that amount coming from new health reform efforts, with half of that amount coming from new revenues such as higher taxes on wealthier Americans, and the other revenues such as higher taxes on wealthier Americans, and the other half from Medicare program savings including:half from Medicare program savings including:

•• Bundling payments for hospital care and post-acute careBundling payments for hospital care and post-acute care

•• Cutting payments to Medicare Advantage plansCutting payments to Medicare Advantage plans

•• Paying hospitals with certain readmission rates less.Paying hospitals with certain readmission rates less.

•• Linking a portion of inpatient payment to performance.Linking a portion of inpatient payment to performance.

Inorder to achieve the common goals of constraining health care Inorder to achieve the common goals of constraining health care costs, expanding access, and improving quality, he will work with costs, expanding access, and improving quality, he will work with Congress over the next year using the following set of eight Congress over the next year using the following set of eight principles:principles:

The plan creates a 10-year reserve fund of $630 billion to finance The plan creates a 10-year reserve fund of $630 billion to finance health reform efforts, with half of that amount coming from new health reform efforts, with half of that amount coming from new revenues such as higher taxes on wealthier Americans, and the other revenues such as higher taxes on wealthier Americans, and the other half from Medicare program savings including:half from Medicare program savings including:

•• Bundling payments for hospital care and post-acute careBundling payments for hospital care and post-acute care

•• Cutting payments to Medicare Advantage plansCutting payments to Medicare Advantage plans

•• Paying hospitals with certain readmission rates less.Paying hospitals with certain readmission rates less.

•• Linking a portion of inpatient payment to performance.Linking a portion of inpatient payment to performance.

Inorder to achieve the common goals of constraining health care Inorder to achieve the common goals of constraining health care costs, expanding access, and improving quality, he will work with costs, expanding access, and improving quality, he will work with Congress over the next year using the following set of eight Congress over the next year using the following set of eight principles:principles:

President’s Budget Remarks, politico.com, 2/26/09President’s Budget Remarks, politico.com, 2/26/09


Outline of Obama Health Plan ( 2 of 3 )Outline of Obama Health Plan ( 2 of 3 )Outline of Obama Health Plan ( 2 of 3 )Outline of Obama Health Plan ( 2 of 3 )

Protect Families’ Financial Health. Protect Families’ Financial Health. The plan must reduce the The plan must reduce the growing premiums and other costs paid for health care.growing premiums and other costs paid for health care.

Make Health Coverage Affordable. Make Health Coverage Affordable. The plan must reduce high The plan must reduce high administrative costs, unnecessary tests and services, waste, and other administrative costs, unnecessary tests and services, waste, and other inefficiencies that consume money with no added health benefits.inefficiencies that consume money with no added health benefits.

Aim for Universality. Aim for Universality. The plan must put the United States on a The plan must put the United States on a clear path to cover all Americans.clear path to cover all Americans.

Provide Portability of Coverage. Provide Portability of Coverage. People should not be locked into People should not be locked into their job just to secure health coverage; end preexisting conditions.their job just to secure health coverage; end preexisting conditions.

Guarantee Choice. Guarantee Choice. The plan should provide Americans a choice of The plan should provide Americans a choice of health plans and physicians. They should have the option of keeping health plans and physicians. They should have the option of keeping their employer-based health plan.their employer-based health plan.

Protect Families’ Financial Health. Protect Families’ Financial Health. The plan must reduce the The plan must reduce the growing premiums and other costs paid for health care.growing premiums and other costs paid for health care.

Make Health Coverage Affordable. Make Health Coverage Affordable. The plan must reduce high The plan must reduce high administrative costs, unnecessary tests and services, waste, and other administrative costs, unnecessary tests and services, waste, and other inefficiencies that consume money with no added health benefits.inefficiencies that consume money with no added health benefits.

Aim for Universality. Aim for Universality. The plan must put the United States on a The plan must put the United States on a clear path to cover all Americans.clear path to cover all Americans.

Provide Portability of Coverage. Provide Portability of Coverage. People should not be locked into People should not be locked into their job just to secure health coverage; end preexisting conditions.their job just to secure health coverage; end preexisting conditions.

Guarantee Choice. Guarantee Choice. The plan should provide Americans a choice of The plan should provide Americans a choice of health plans and physicians. They should have the option of keeping health plans and physicians. They should have the option of keeping their employer-based health plan.their employer-based health plan.



Outine of Obama Health Plan ( 3 of 3 )Outine of Obama Health Plan ( 3 of 3 )Outine of Obama Health Plan ( 3 of 3 )Outine of Obama Health Plan ( 3 of 3 )

Invest in Prevention and Wellness. Invest in Prevention and Wellness. The plan must invest in public The plan must invest in public health measures proven to reduce cost drivers in our system—such health measures proven to reduce cost drivers in our system—such as obesity, sedentary lifestyles, and smoking—as well as guarantee as obesity, sedentary lifestyles, and smoking—as well as guarantee access to proven preventive treatments.access to proven preventive treatments.

Improve Patient Safety and Quality Care. Improve Patient Safety and Quality Care. The plan must ensure The plan must ensure the implementation of proven patient safety measures and provide the implementation of proven patient safety measures and provide incentives for changes in the delivery system to reduce unnecessary incentives for changes in the delivery system to reduce unnecessary variability in patient care. It must support the widespread use of variability in patient care. It must support the widespread use of health information technology and the development of data on the health information technology and the development of data on the effectiveness of medical interventions to improve the quality of care effectiveness of medical interventions to improve the quality of care delivered.delivered.

Maintain Long-Term Fiscal Sustainability. Maintain Long-Term Fiscal Sustainability. The plan must pay for The plan must pay for itself by reducing the level of cost growth, improving productivity, itself by reducing the level of cost growth, improving productivity, and dedicating additional sources of revenue.and dedicating additional sources of revenue.

Invest in Prevention and Wellness. Invest in Prevention and Wellness. The plan must invest in public The plan must invest in public health measures proven to reduce cost drivers in our system—such health measures proven to reduce cost drivers in our system—such as obesity, sedentary lifestyles, and smoking—as well as guarantee as obesity, sedentary lifestyles, and smoking—as well as guarantee access to proven preventive treatments.access to proven preventive treatments.

Improve Patient Safety and Quality Care. Improve Patient Safety and Quality Care. The plan must ensure The plan must ensure the implementation of proven patient safety measures and provide the implementation of proven patient safety measures and provide incentives for changes in the delivery system to reduce unnecessary incentives for changes in the delivery system to reduce unnecessary variability in patient care. It must support the widespread use of variability in patient care. It must support the widespread use of health information technology and the development of data on the health information technology and the development of data on the effectiveness of medical interventions to improve the quality of care effectiveness of medical interventions to improve the quality of care delivered.delivered.

Maintain Long-Term Fiscal Sustainability. Maintain Long-Term Fiscal Sustainability. The plan must pay for The plan must pay for itself by reducing the level of cost growth, improving productivity, itself by reducing the level of cost growth, improving productivity, and dedicating additional sources of revenue.and dedicating additional sources of revenue.



Medicare Reform: Current & ProposedMedicare Reform: Current & ProposedMedicare Reform: Current & ProposedMedicare Reform: Current & Proposed

• Medicare Advantage (aka Medicare privatization) Medicare Advantage (aka Medicare privatization) • Value Based Purchasing (aka P4P)Value Based Purchasing (aka P4P)• *Medical Home: pmpm fee care coordination*Medical Home: pmpm fee care coordination• *Primary Care: +$ with modifier to CPT codes*Primary Care: +$ with modifier to CPT codes• *Bundling: one payment for episode of care that *Bundling: one payment for episode of care that

combines hospital, physician and post hospitalcombines hospital, physician and post hospital• *Medicare as leverage on entire health system*Medicare as leverage on entire health system

• Medicare Advantage (aka Medicare privatization) Medicare Advantage (aka Medicare privatization) • Value Based Purchasing (aka P4P)Value Based Purchasing (aka P4P)• *Medical Home: pmpm fee care coordination*Medical Home: pmpm fee care coordination• *Primary Care: +$ with modifier to CPT codes*Primary Care: +$ with modifier to CPT codes• *Bundling: one payment for episode of care that *Bundling: one payment for episode of care that

combines hospital, physician and post hospitalcombines hospital, physician and post hospital• *Medicare as leverage on entire health system*Medicare as leverage on entire health system

* Medicare Payment Advisory Meeting Minutes for April 9th, 2008* Medicare Payment Advisory Meeting Minutes for April 9th, 2008


Medicare Advantage Market Share by WI CountiesMedicare Advantage Market Share by WI CountiesMedicare Advantage Market Share by WI CountiesMedicare Advantage Market Share by WI Counties

Average = 22%Average = 22%

Lowest Quartile (white)Lowest Quartile (white)8% to 19%8% to 19%

Second QuartileSecond Quartile19% to 23%19% to 23%

Third QuartileThird Quartile23% to 29%23% to 29%

Highest Quartile (red)Highest Quartile (red)29% to 58%29% to 58%

• RWHC MembersRWHC Members

CMS Estimates as of 3/08CMS Estimates as of 3/08


WISC Senate: Healthy Wisconsin Authority & PlanWISC Senate: Healthy Wisconsin Authority & PlanWISC Senate: Healthy Wisconsin Authority & PlanWISC Senate: Healthy Wisconsin Authority & Plan

• Healthy Wisconsin Authority: public board with 5 labor Healthy Wisconsin Authority: public board with 5 labor + 5 business + 2 farmers + 3 consumers. (Providers only + 5 business + 2 farmers + 3 consumers. (Providers only on an advisory committee). on an advisory committee).

• Healthy Wisconsin Plan: same as current state employee Healthy Wisconsin Plan: same as current state employee health benefits paid for by employer tax. health benefits paid for by employer tax.

• In each region a Fee For Service plan with provider rates In each region a Fee For Service plan with provider rates set by HWA along with networks invited to submit bids. set by HWA along with networks invited to submit bids.

• Users of lowest cost networks incur only standard co-pay Users of lowest cost networks incur only standard co-pay and deductible; if not available, no added cost for FFS.and deductible; if not available, no added cost for FFS.

• I.e. default of “managed competition” is “single payer.”I.e. default of “managed competition” is “single payer.”

• Healthy Wisconsin Authority: public board with 5 labor Healthy Wisconsin Authority: public board with 5 labor + 5 business + 2 farmers + 3 consumers. (Providers only + 5 business + 2 farmers + 3 consumers. (Providers only on an advisory committee). on an advisory committee).

• Healthy Wisconsin Plan: same as current state employee Healthy Wisconsin Plan: same as current state employee health benefits paid for by employer tax. health benefits paid for by employer tax.

• In each region a Fee For Service plan with provider rates In each region a Fee For Service plan with provider rates set by HWA along with networks invited to submit bids. set by HWA along with networks invited to submit bids.

• Users of lowest cost networks incur only standard co-pay Users of lowest cost networks incur only standard co-pay and deductible; if not available, no added cost for FFS.and deductible; if not available, no added cost for FFS.

• I.e. default of “managed competition” is “single payer.”I.e. default of “managed competition” is “single payer.”


Governor’s Incremental Reform to Cover 98%Governor’s Incremental Reform to Cover 98%Governor’s Incremental Reform to Cover 98%Governor’s Incremental Reform to Cover 98%

• Phase I - BadgerCare+ for All Kids (2/1/08)Phase I - BadgerCare+ for All Kids (2/1/08)

• Phase II - BC+ Childless Adults Expansion (1/1/09); Phase II - BC+ Childless Adults Expansion (1/1/09); waiver needed; individuals need to be uninsured for one waiver needed; individuals need to be uninsured for one year to prevent “crowd-out.”year to prevent “crowd-out.”

• Phase III - BadgerChoice for Small Business (under Phase III - BadgerChoice for Small Business (under development) A single community rated pool and buying development) A single community rated pool and buying group for about 800,000 individuals "to negotiate better group for about 800,000 individuals "to negotiate better rates from insurance companies … and access affordable rates from insurance companies … and access affordable health insurance without having to pay broker fees or health insurance without having to pay broker fees or navigate through substantial paperwork." Subsidy for navigate through substantial paperwork." Subsidy for very small businesses (<10 employees).very small businesses (<10 employees).

• Phase I - BadgerCare+ for All Kids (2/1/08)Phase I - BadgerCare+ for All Kids (2/1/08)

• Phase II - BC+ Childless Adults Expansion (1/1/09); Phase II - BC+ Childless Adults Expansion (1/1/09); waiver needed; individuals need to be uninsured for one waiver needed; individuals need to be uninsured for one year to prevent “crowd-out.”year to prevent “crowd-out.”

• Phase III - BadgerChoice for Small Business (under Phase III - BadgerChoice for Small Business (under development) A single community rated pool and buying development) A single community rated pool and buying group for about 800,000 individuals "to negotiate better group for about 800,000 individuals "to negotiate better rates from insurance companies … and access affordable rates from insurance companies … and access affordable health insurance without having to pay broker fees or health insurance without having to pay broker fees or navigate through substantial paperwork." Subsidy for navigate through substantial paperwork." Subsidy for very small businesses (<10 employees).very small businesses (<10 employees).


Private & public sector Private & public sector payers are shifting to payers are shifting to transparent payments transparent payments through “Pay 4 through “Pay 4 Performance” & Performance” & “Consumer Driven “Consumer Driven Health Plans” to create Health Plans” to create economic incentives for economic incentives for

providers & patients.providers & patients.

4. From Reimbursement to Transparent Payment4. From Reimbursement to Transparent Payment4. From Reimbursement to Transparent Payment4. From Reimbursement to Transparent Payment


What is Pay 4 Performance?What is Pay 4 Performance?What is Pay 4 Performance?What is Pay 4 Performance?

• Financial incentives to Financial incentives to improve quality of care as improve quality of care as well as to control costs by well as to control costs by reducing errors & reducing errors & inappropriate utilization.inappropriate utilization.

• Steady increase nationally, Steady increase nationally, already common in WI.already common in WI.

• Medicare calls it “Value Medicare calls it “Value Based Purchasing.”Based Purchasing.”

• Financial incentives to Financial incentives to improve quality of care as improve quality of care as well as to control costs by well as to control costs by reducing errors & reducing errors & inappropriate utilization.inappropriate utilization.

• Steady increase nationally, Steady increase nationally, already common in WI.already common in WI.

• Medicare calls it “Value Medicare calls it “Value Based Purchasing.”Based Purchasing.”

http://www.ahrq.gov/http://www.ahrq.gov/


What is Consumer Driven Health Care?What is Consumer Driven Health Care?What is Consumer Driven Health Care?What is Consumer Driven Health Care?

• Stated purpose is to create new economic incentives by Stated purpose is to create new economic incentives by shifting cost/risk to the insured through increasing:shifting cost/risk to the insured through increasing:• deductiblesdeductibles• co-payments or coinsurance for office visitsco-payments or coinsurance for office visits• cost sharing for prescriptioncost sharing for prescription drugsdrugs• the amount employeesthe amount employees pay for premiums.pay for premiums.

• Sometimes combined with a employer or employee Sometimes combined with a employer or employee funded Health Savings Accounts (HSAs) or employer funded Health Savings Accounts (HSAs) or employer funded Health Reimbursement Arrangements (HRAs).funded Health Reimbursement Arrangements (HRAs).

• Stated purpose is to create new economic incentives by Stated purpose is to create new economic incentives by shifting cost/risk to the insured through increasing:shifting cost/risk to the insured through increasing:• deductiblesdeductibles• co-payments or coinsurance for office visitsco-payments or coinsurance for office visits• cost sharing for prescriptioncost sharing for prescription drugsdrugs• the amount employeesthe amount employees pay for premiums.pay for premiums.

• Sometimes combined with a employer or employee Sometimes combined with a employer or employee funded Health Savings Accounts (HSAs) or employer funded Health Savings Accounts (HSAs) or employer funded Health Reimbursement Arrangements (HRAs).funded Health Reimbursement Arrangements (HRAs).


Controversy Around Consumer Driven Health CareControversy Around Consumer Driven Health CareControversy Around Consumer Driven Health CareControversy Around Consumer Driven Health Care

• An appropriate way for the insured to become An appropriate way for the insured to become better consumers?better consumers?

• Nothing more than cost shifting to insured?Nothing more than cost shifting to insured?

• A major health reform needed in America?A major health reform needed in America?

• No place in American health care?No place in American health care?

• An appropriate way for the insured to become An appropriate way for the insured to become better consumers?better consumers?

• Nothing more than cost shifting to insured?Nothing more than cost shifting to insured?

• A major health reform needed in America?A major health reform needed in America?

• No place in American health care?No place in American health care?


5. Quality or Price? “Show Me the Numbers”5. Quality or Price? “Show Me the Numbers”5. Quality or Price? “Show Me the Numbers”5. Quality or Price? “Show Me the Numbers”

• Challenge: rural providers Challenge: rural providers need to work collaboratively, need to work collaboratively, harder and smarter to make harder and smarter to make up for fewer economies of up for fewer economies of scale and higher stand-by scale and higher stand-by costs.costs.

• Challenge: measures used to Challenge: measures used to evaluate providers have often evaluate providers have often not addressed statistical issues not addressed statistical issues of “small numbers,” mix of of “small numbers,” mix of services and characteristics of services and characteristics of population served.population served.

• Challenge: rural providers Challenge: rural providers need to work collaboratively, need to work collaboratively, harder and smarter to make harder and smarter to make up for fewer economies of up for fewer economies of scale and higher stand-by scale and higher stand-by costs.costs.

• Challenge: measures used to Challenge: measures used to evaluate providers have often evaluate providers have often not addressed statistical issues not addressed statistical issues of “small numbers,” mix of of “small numbers,” mix of services and characteristics of services and characteristics of population served.population served.

““Small numbers are a big deal” by TimSmall numbers are a big deal” by Tim Size, Size, Modern Healthcare, Modern Healthcare, 5/14/075/14/07


Quality Improvement? “Show Me the Numbers”Quality Improvement? “Show Me the Numbers”Quality Improvement? “Show Me the Numbers”Quality Improvement? “Show Me the Numbers”

““Not everything that can be counted counts, and Not everything that can be counted counts, and not everything that counts can be counted.” not everything that counts can be counted.”

Albert EinsteinAlbert Einstein

But what is reported, is changed!But what is reported, is changed!

““Not everything that can be counted counts, and Not everything that can be counted counts, and not everything that counts can be counted.” not everything that counts can be counted.”

Albert EinsteinAlbert Einstein

But what is reported, is changed!But what is reported, is changed!

Dana Richardson RN, MHA, V.P. Quality, Wisconsin Hospital AssociationDana Richardson RN, MHA, V.P. Quality, Wisconsin Hospital AssociationTo National Advisory Committee on Rural Health & Human Services, 9-13-07.To National Advisory Committee on Rural Health & Human Services, 9-13-07.


WHA CheckPoint: Error PreventionWHA CheckPoint: Error PreventionWHA CheckPoint: Error PreventionWHA CheckPoint: Error Prevention

Wisconsin State Average (0-100 pts)

91 92

88

9998 98 98100

83

40

50

60

70

80

90

100

Site Marking Procedure Check Eliminate Abbrev. Remove E-Lytes Med Reconcil

Mar-04 Sep-06

Dana Richardson RN, MHA, V.P. Quality, Wisconsin Hospital AssociationDana Richardson RN, MHA, V.P. Quality, Wisconsin Hospital AssociationTo National Advisory Committee on Rural Health & Human Services, 9-13-07.To National Advisory Committee on Rural Health & Human Services, 9-13-07.


Public Reporting Opportunities & ChallengesPublic Reporting Opportunities & ChallengesPublic Reporting Opportunities & ChallengesPublic Reporting Opportunities & Challenges

““Small numbers are a big deal” by Tim Size, Small numbers are a big deal” by Tim Size, Modern Healthcare, 5/14/07Modern Healthcare, 5/14/07

• Dysfunctional cacophony of measurement Dysfunctional cacophony of measurement voices; multiple, similar demands is wasteful.voices; multiple, similar demands is wasteful.

• All must have opportunity to demonstrate high All must have opportunity to demonstrate high quality of care and cost effectiveness.quality of care and cost effectiveness.

• No Data = “Backwater Status”No Data = “Backwater Status”• Rural providers must be “at the table.”Rural providers must be “at the table.”• Confounding factors need to be considered-Confounding factors need to be considered-

sickest patients (dieing) may stay at hospital sickest patients (dieing) may stay at hospital close to family others transferred out.close to family others transferred out.

• Dysfunctional cacophony of measurement Dysfunctional cacophony of measurement voices; multiple, similar demands is wasteful.voices; multiple, similar demands is wasteful.

• All must have opportunity to demonstrate high All must have opportunity to demonstrate high quality of care and cost effectiveness.quality of care and cost effectiveness.

• No Data = “Backwater Status”No Data = “Backwater Status”• Rural providers must be “at the table.”Rural providers must be “at the table.”• Confounding factors need to be considered-Confounding factors need to be considered-

sickest patients (dieing) may stay at hospital sickest patients (dieing) may stay at hospital close to family others transferred out.close to family others transferred out.


6. Workforce Supply Going Down, Demand Up6. Workforce Supply Going Down, Demand Up6. Workforce Supply Going Down, Demand Up6. Workforce Supply Going Down, Demand Up

Attitudinal change Attitudinal change required for all required for all vocational and vocational and professional professional schools to fulfill schools to fulfill their major role in their major role in increasing supply increasing supply and distribution.and distribution.

Attitudinal change Attitudinal change required for all required for all vocational and vocational and professional professional schools to fulfill schools to fulfill their major role in their major role in increasing supply increasing supply and distribution.and distribution.


Dennis K. Winters, Chief, Office of Economic Advisors, Wisconsin Dennis K. Winters, Chief, Office of Economic Advisors, Wisconsin

Department of Workforce Development to NACRHHS, 9-12-07.Department of Workforce Development to NACRHHS, 9-12-07.

Workforce Retiring More Rapidly than Being ReplacedWorkforce Retiring More Rapidly than Being ReplacedWorkforce Retiring More Rapidly than Being ReplacedWorkforce Retiring More Rapidly than Being Replaced

Juncture of 18 & 65 year old population in Wisconsin

0

20,000

40,000

60,000

80,000

100,000

2005 2010 2015 2020 2025 2030

18 yr olds 65 yr olds

Source: WI Dept. of Administration, Demographic Services, Pop. projections, 2004


Wisconsin Population and Labor Force

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1960 1970 1980 1990 2000 2010 2020 2030

( x 1000 )

POPULATION

CIVILIAN LABOR FORCE

Workforce Growth Becomes Flat, Demand GrowsWorkforce Growth Becomes Flat, Demand GrowsWorkforce Growth Becomes Flat, Demand GrowsWorkforce Growth Becomes Flat, Demand Grows

Source: Bureau of Labor Statistics, OEA

Dennis K. Winters, Chief, Office of Economic Advisors, Wisconsin Dennis K. Winters, Chief, Office of Economic Advisors, Wisconsin

Department of Workforce Development to NACRHHS, 9-12-07.Department of Workforce Development to NACRHHS, 9-12-07.


One Success Story; We Need More Of Them!One Success Story; We Need More Of Them!One Success Story; We Need More Of Them!One Success Story; We Need More Of Them!

• WARM is dedicated to improving the WARM is dedicated to improving the supply of physicians in rural WI & supply of physicians in rural WI & health of rural WI communities.health of rural WI communities.

• Students receive extensive clinical Students receive extensive clinical training in rural Wisconsin during 3rd training in rural Wisconsin during 3rd & 4th yrs. & 4th yrs.

• Students will learn to address medical Students will learn to address medical issues that are unique to rural areas. issues that are unique to rural areas.

• Only rural focused program in the Only rural focused program in the nation that supports a student’s nation that supports a student’s pursuit of any specialty.pursuit of any specialty.

• WARM is dedicated to improving the WARM is dedicated to improving the supply of physicians in rural WI & supply of physicians in rural WI & health of rural WI communities.health of rural WI communities.

• Students receive extensive clinical Students receive extensive clinical training in rural Wisconsin during 3rd training in rural Wisconsin during 3rd & 4th yrs. & 4th yrs.

• Students will learn to address medical Students will learn to address medical issues that are unique to rural areas. issues that are unique to rural areas.

• Only rural focused program in the Only rural focused program in the nation that supports a student’s nation that supports a student’s pursuit of any specialty.pursuit of any specialty.


Retention, Recruitment & Continuing EducationRetention, Recruitment & Continuing EducationRetention, Recruitment & Continuing EducationRetention, Recruitment & Continuing Education

• Advisory Board memberships Advisory Board memberships (Health Care Advisory Board, (Health Care Advisory Board, Nursing Executive Center, HR Nursing Executive Center, HR Investment Center)*Investment Center)*

• Club Scrub*Club Scrub*• Healthy WI Leadership Institute*Healthy WI Leadership Institute*• Retire & Departure Plan SurveysRetire & Departure Plan Surveys• Rural Health Careers Web Site*Rural Health Careers Web Site*• RWHC Distance Learning RWHC Distance Learning

OpportunitiesOpportunities• RWHC Education CoordinatorRWHC Education Coordinator• RWHC H2H (Hospital to RWHC H2H (Hospital to

Hospital CEO Visits)Hospital CEO Visits)

• Advisory Board memberships Advisory Board memberships (Health Care Advisory Board, (Health Care Advisory Board, Nursing Executive Center, HR Nursing Executive Center, HR Investment Center)*Investment Center)*

• Club Scrub*Club Scrub*• Healthy WI Leadership Institute*Healthy WI Leadership Institute*• Retire & Departure Plan SurveysRetire & Departure Plan Surveys• Rural Health Careers Web Site*Rural Health Careers Web Site*• RWHC Distance Learning RWHC Distance Learning

OpportunitiesOpportunities• RWHC Education CoordinatorRWHC Education Coordinator• RWHC H2H (Hospital to RWHC H2H (Hospital to

Hospital CEO Visits)Hospital CEO Visits)

• RWHC Roundtables RWHC Roundtables • RWHC Workforce Development RWHC Workforce Development

CoordinatorCoordinator • WI Academy Rural Medicine*WI Academy Rural Medicine*• WI Nurse Preceptor Training* WI Nurse Preceptor Training* • WI Nurse Residency Program*WI Nurse Residency Program* • WI Office Rural Health Physician WI Office Rural Health Physician

Recruitment Service*Recruitment Service*• WI Pharmacy Forum*WI Pharmacy Forum*• WI Select Committee on Health WI Select Committee on Health

Care Workforce Development*Care Workforce Development*• WIWI StateState Lab.Lab. ResponseResponse Network*Network*

• RWHC Roundtables RWHC Roundtables • RWHC Workforce Development RWHC Workforce Development

CoordinatorCoordinator • WI Academy Rural Medicine*WI Academy Rural Medicine*• WI Nurse Preceptor Training* WI Nurse Preceptor Training* • WI Nurse Residency Program*WI Nurse Residency Program* • WI Office Rural Health Physician WI Office Rural Health Physician

Recruitment Service*Recruitment Service*• WI Pharmacy Forum*WI Pharmacy Forum*• WI Select Committee on Health WI Select Committee on Health

Care Workforce Development*Care Workforce Development*• WIWI StateState Lab.Lab. ResponseResponse Network*Network*

* Program started or operated by or with a strategic partner.* Program started or operated by or with a strategic partner.


7. Healthcare Reform 7. Healthcare Reform Health ReformHealth Reform7. Healthcare Reform 7. Healthcare Reform Health ReformHealth Reform

RWHC Eye On Health

"Get over the Doc Welby thing, what you do makes a lot more difference to your health than what I do."

RWHC Eye On Health

"Get over the Doc Welby thing, what you do makes a lot more difference to your health than what I do."

American Hospital Association’s “Health for Life, American Hospital Association’s “Health for Life, Better Health, Better Health Care”Better Health, Better Health Care” August, 2007August, 2007

““We must provide We must provide education and preventive education and preventive care, help all reach care, help all reach highest potential for highest potential for health and reverse the health and reverse the trend of avoidable illness. trend of avoidable illness. Individuals must achieve Individuals must achieve healthier lifestyles; take healthier lifestyles; take responsibility for health responsibility for health behaviors and choices… behaviors and choices… and act.”and act.”


Health Status by WI CountiesHealth Status by WI CountiesHealth Status by WI CountiesHealth Status by WI Counties

Worst Quartile (white)Worst Quartile (white)Second Quartile (red)Second Quartile (red)Third Quartile (redder)Third Quartile (redder)Best Quartile (reddest)Best Quartile (reddest)

75% urban counties 75% urban counties better than average better than average compared to 33% of rural compared to 33% of rural counties better than counties better than average.average.

CMS Estimates as of 7/07CMS Estimates as of 7/07Above calculated from the 2007Above calculated from the 2007 “Wisconsin County Health Rankings,” “Wisconsin County Health Rankings,”University of Wisconsin Population Health InstituteUniversity of Wisconsin Population Health Institute

Rural WisconsinRural WisconsinHealth CooperativeHealth Cooperative2005 Wisconsin County Health Rankings2005 Wisconsin County Health Rankings , University of Wisconsin , University of Wisconsin

Population Health InstitutePopulation Health Institute


Health Status Also Driver of Economic HealthHealth Status Also Driver of Economic HealthHealth Status Also Driver of Economic HealthHealth Status Also Driver of Economic Health

““If we can change lifestyles, it will have more impact on If we can change lifestyles, it will have more impact on cutting costs than anything else we can do.” cutting costs than anything else we can do.”

Larry Rambo, CEOLarry Rambo, CEOHumana Wisconsin and MichiganHumana Wisconsin and Michigan

““Businesses will move to where healthcare coverage is Businesses will move to where healthcare coverage is less expensive, or they will cut back and even terminate less expensive, or they will cut back and even terminate coverage for their employees. Either way, it's the coverage for their employees. Either way, it's the residents of your towns and cities that lose out.” residents of your towns and cities that lose out.”

Thomas Donohue, President & CEO, Thomas Donohue, President & CEO, U.S. Chamber of CommerceU.S. Chamber of Commerce

““If we can change lifestyles, it will have more impact on If we can change lifestyles, it will have more impact on cutting costs than anything else we can do.” cutting costs than anything else we can do.”

Larry Rambo, CEOLarry Rambo, CEOHumana Wisconsin and MichiganHumana Wisconsin and Michigan

““Businesses will move to where healthcare coverage is Businesses will move to where healthcare coverage is less expensive, or they will cut back and even terminate less expensive, or they will cut back and even terminate coverage for their employees. Either way, it's the coverage for their employees. Either way, it's the residents of your towns and cities that lose out.” residents of your towns and cities that lose out.”

Thomas Donohue, President & CEO, Thomas Donohue, President & CEO, U.S. Chamber of CommerceU.S. Chamber of Commerce


Strategic Barriers to Getting InvolvedStrategic Barriers to Getting InvolvedStrategic Barriers to Getting InvolvedStrategic Barriers to Getting Involved

• ResourcesResources. Hospitals and clinics struggling to address . Hospitals and clinics struggling to address traditional responsibilities with tight budgets are not traditional responsibilities with tight budgets are not looking for new roles “that no one will pay us to do.” looking for new roles “that no one will pay us to do.”

• TraditionTradition. The role of providers has been seen as . The role of providers has been seen as treating individual patients. Population health seen as treating individual patients. Population health seen as the job of local and state public health departments. the job of local and state public health departments.

• ValuesValues. The discomfort that most of us feel when . The discomfort that most of us feel when talking about addressing population health issues, many talking about addressing population health issues, many of which relate to individual behaviors – other people’s of which relate to individual behaviors – other people’s choices and their freedom to make those choices.choices and their freedom to make those choices.

• ResourcesResources. Hospitals and clinics struggling to address . Hospitals and clinics struggling to address traditional responsibilities with tight budgets are not traditional responsibilities with tight budgets are not looking for new roles “that no one will pay us to do.” looking for new roles “that no one will pay us to do.”

• TraditionTradition. The role of providers has been seen as . The role of providers has been seen as treating individual patients. Population health seen as treating individual patients. Population health seen as the job of local and state public health departments. the job of local and state public health departments.

• ValuesValues. The discomfort that most of us feel when . The discomfort that most of us feel when talking about addressing population health issues, many talking about addressing population health issues, many of which relate to individual behaviors – other people’s of which relate to individual behaviors – other people’s choices and their freedom to make those choices.choices and their freedom to make those choices.

““Population Health Improvement & Rural Hospital Balanced Scorecards,” Population Health Improvement & Rural Hospital Balanced Scorecards,”

Tim Size, David Kindig & Clint MacKinney, Tim Size, David Kindig & Clint MacKinney, Journal Rural HealthJournal Rural Health, Spring, 2006, Spring, 2006


The Risk of Doing NothingThe Risk of Doing NothingThe Risk of Doing NothingThe Risk of Doing Nothing


For a free subscription RWHC e-newsletter, email For a free subscription RWHC e-newsletter, email [email protected]@rwhc.com with “subscribe” on subject with “subscribe” on subject line. line.

For a free subscription RWHC e-newsletter, email For a free subscription RWHC e-newsletter, email [email protected]@rwhc.com with “subscribe” on subject with “subscribe” on subject line. line.

Rural Wisconsin Health Cooperative How are Federal & State Policies Likely to Affect Rural Health? Tim Size Executive Director RWHC for the Sauk County.

Documents

rural health

rwhc budget

better health careaugust

rural wi communities

rural advocate of choice

context matters rwhc

member fees

affiliated slide